Tax reform veterans encourage new push

The comments from Gephardt and Baker — who also stressed that policymakers should aim for a reform plan that would collect the same amount of revenue and keep the tax code’s current distribution levels — in some ways underscored the challenge lawmakers face when it comes to tax reform, especially in a time of steep deficits and with a presidential election upcoming.

President Obama’s fiscal commission recommended using an overhaul of the tax code to help narrow deficits, and key lawmakers like Sen. Kent Conrad (D-N.D.) have stressed that tax reform should be part of any comprehensive fiscal plan.

Conrad, the chairman of the Senate Budget Committee, is also part of the so-called “Gang of Six,” a bipartisan group of senators using the debt panel’s plan as a guidepost for legislation.

On the other side of the spectrum, some Republican lawmakers and business leaders have said that a tax reform plan should focus on increasing the ability of American businesses to compete worldwide, even if that means it does not collect as much revenue at first.

After Wednesday’s roundtable discussion, the two chairs of the joint tax panel — Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, and Sen. Max Baucus (D-Mont.), the head of the Finance Committee — emphasized to reporters that the tax reform discussion was still in very early stages.

“We’re trying to set principles and ideas, and try to get a framework we can both work in, both House and Senate,” Camp said. “So that’s our mission right now.”

But as Wednesday’s gathering showed, there is likely to be some differences of opinion in trying to reach those principles and ideas.

For instance, Reps. Sandy Levin (D-Mich.), the ranking member on Ways and Means, and Charles Rangel (D-N.Y.) expressed concern Wednesday that partisanship had sharply increased in the quarter-century since the last tax code overhaul.

“You tell me now the stars are aligned, and I say, 'Wow, what are you drinking?'” Rangel told Baker at one point.

Levin also signaled he was worried about locking in distribution levels in the tax code, after saying in his opening statement that making the Bush tax cuts permanent would fasten into place policies skewed toward the wealthy.

But Gephardt responded that, in an era of ideological division, tax reform might be an area where the two parties can come together.

“I think working together or bipartisanship is like baseball or playing the piano,” he said. “You’ve got to practice it. You’ve got to do it. You’ve got to start. And this may be a place to start.”

Even with all the potential challenges before them, Camp and Baucus added after the roundtable discussion that they were heartened they were far from alone in pushing for tax reform.

Treasury Secretary Timothy Geithner said Wednesday the administration was working on a corporate tax reform plan, after the president called for an overhaul of that code in his State of the Union address.

And just this week, Sens. Ron Wyden (D-Ore.) and Dan Coats (R-Ind.) have introduced comprehensive tax-reform legislation, while House Republicans included a framework for revamping the tax code in their 2012 budget proposal.

“We want to succeed,” Baucus said. “And to succeed means we’ve got to not rush into this too quickly.”